Zcash is Clogging up in What Looks Like a Spam Attack

The Zcash protocol might be under a spam attack, as analysts pointed out on Twitter in a long discussion that started since Wednesday.


Being a privacy-focused protocol, Zcash’s “Shielded Transaction” feature designed for privacy is now being misused by the attacker.

According to the details shared by the analysts, the attacker has been adding output data to the shielded transactions, which are largely known to be data sensitive. By virtue of the attack, the size of the blockchain has grown from 31 GB in mid-June to more than 100 GB at this time per data from Blockchair.

The attack has been ongoing for a while, even though it has just been brought to the public’s notice. In fact, the knowledge exhibited by the contributors to the discourse on Twitter is evident that many have been investigating the occurrence for quite some time.

Notably, Zcash has not had any known downtime to date. The spam of the shielded transactions is placing intense demands on the protocol, thus causing a lag. The blocks are finding it hard to synchronize with the broader protocol, a situation which, if persisted, could cause a major drawback for the protocol.

“At this point, there only seems to be two problems with the spam: it’s bloating the chain size, and it’s making it harder for wallets to sync,” Sean Bowe, an engineer at Zcash’s core development firm Electric Coin Company said, adding that “Neither problem is contributed to by Orchard at all. It shouldn’t even be part of the equation even if the spammer was using Orchard!” 

It is unclear what the benefit is to the hacker at this time, but analysts on Twitter noted that the attack has survived this long because of the lack of a transparent fee structure on the Zcash protocol. The attack is notably costing the perpetrator(s) as low as $10 per day. 

The prevalence of hacking in the blockchain ecosystem is now very alarming, with Solana and Ethereum Classic having recorded their fair share of disruptions in recent times.

Image source: Shutterstock


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Bitcoin Volatility Fades Away; Analyst Who Predicted Bitcoin Drop to 35000 Points Out Top Most Promising Privacy Coins

In terms of seasonality, May is considered a relatively successful month for BTC. Given the current risk aversion among investors and the macroeconomic environment, this May may prove to be different. 


Those accustomed to Bitcoin’s extreme volatility are scratching their heads and looking forward to a rally similar to that of last year when the flagship cryptocurrency doubled in price from July to November’s all-time high. What happened to Bitcoin’s legendary volatility? The following are a few possible explanations. 


BTC Is Still Correlated, But to a Lesser Degree


As concerns grow over how aggressively the Federal Reserve should tighten policy to combat decades-high inflation, richly valued tech stocks have been experiencing historic volatility. Bitcoin, however, hasn’t been battered to the same extent.


The chart below measures systematic risk by looking at how Bitcoin’s returns correlate with the market. As of right now, its value is 0.0362, which indicates that it is moving in sync with the benchmark, but not as drastically.


Source: Macroaxis.com


Bitcoin Volatility Vanishes


I wrote in December that institutional investors might dampen the volatility of the crypto market and smooth out the market’s dynamics some time in the future, and it seems we are already witnessing that.


The Average True Range Index, a volatility indicator, shows that Bitcoin volatility has been falling and is currently at its lowest level since December 2020.


Source: Macroaxis.com


Top Performing Privacy Coins 


Over the past three months, the privacy coin sector with a combined value of $8.84 billion has posted an overall gain of 20.24% compared to weak or negative performance by other sectors during the same period.


Haven Protocol (XHV)


Haven Protocol posted the biggest gain over the last three months, rising 135.23%. With a market cap of $75,268,861, it traded at $3.04 at the time of writing.


Built on Monero and including xUSD, the world’s first private stablecoin, Haven aims to become an open, private, and decentralized offshore bank, with a mint-and-burn mechanism that allows users to convert between XHV, Haven’s native token, and its ecosystem of synthetic assets and algorithmic stablecoins.

Source: CoinGecko 


Monero (XMR)


Monero (XMR) is the most popular privacy-centric cryptocurrency based on the CryptoNote protocol, a secure and untraceable system. All of Monero’s transactions remain 100% unlinkable and untraceable thanks to a special kind of cryptography.


XMR was worth $221.24 when this article was written, with a market capitalization of $4,006,536,770. For the past three months, it gained 49.81% and outperformed Bitcoin by 40.49%.


Monero is nearing its tail emission on June 8, which is expected to appeal to the mining community and keep the price of XMR high.


Source: CoinGecko 

Railgun (RAIL)


Railgun provides privacy for trading on DEXs and lending due to its fully Eth layer-1 architecture, which does not use layer 2 nodes or cross-chain bridges to compromise security. It is a smart contract system that gives zk-SNARK privacy to any Ethereum transaction or smart contract interaction.

Railgun allows users to go untraceable when trading, using leverage platforms, or adding liquidity with any Ethereum dApp. 


Currently trading at $3.22 with a market cap of $184,773,805, RAIL is 23.5% away from its record high of $4.20 set in January 2022, so it’s likely it will soon retest the new high. 


Source: CoinGecko 


Zcash (ZEC)

Another privacy-preserving cryptocurrency, Zcash provides anonymous value transfer using zero-knowledge cryptography. The protocol provides the option of shielding transactions to ensure they are completely anonymous, or to make them transparent to show them on the Zcash blockchain. 


It has recently been revealed that Edward Snowden played a key role in the creation of Zcash privacy coin.


Source: CoinGecko 


In the past three months, ZEC gained 31.10% against the greenback and 23.04% against Bitcoin. With a market cap of $1,640,053,535, its price is currently $132.16, up 10% over the past 24 hours. 

Image source: pexels.com


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Zcash Co-founder “John Dobbertin” is Actually Edward Snowden

Edward Snowden has been revealed as one of the co-founders of Zcash, after he gave his fellow co-founder Zooko Wilcox permission to disclose his involvement.

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Until now, Snowden was known by the pseudonym “John Dobbertin”.

The identities of the other five co-founders have already been revealed. His identity was revealed while taking part in a new documentary for Zcash, where he gave his Wilcox permission to disclose his involvement “as long as it is clear that I was never paid and had no stake.”

Snowden is popularly known as a whistleblower at the National Security Agency (NSA). While working at the NSA, Snowden released thousands of documents that revealed how the United States was spying on its own citizens. Following this, he moved to Russia after receiving asylum.

He has become a strong advocate of privacy.

Snowden has criticized Bitcoin for its privacy concerns saying it is an “open disaster”.

Zcash has become known for its transaction system which occurs in two pools called “Sprout” and “Sapling.” Both require their own key for access.

According to Zcash’s official website: “Zcash is a privacy-protecting, digital currency built on strong science. With Zcash, people can transact efficiently and safely with low fees. Shielded Zcash ensures transactions remain confidential while allowing people to selectively share address and transaction information for auditing or regulatory compliance.”

Zcash is aimed at using cryptography to provide enhanced privacy for its users compared to other cryptocurrencies such as Bitcoin.

Image source: Shutterstock


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REN price at risk of 50% drop after a bearish trading pattern shows up

The prospects of Ren (REN) continuing its ongoing rebound to fresh highs appear slim as a classic bearish reversal pattern begins to emerge.

Dubbed head and shoulders, the setup appears when the price forms three peaks, with the middle peak (called the head) longer than the other two peaks described as the left and right shoulders. The bottoms of these peaks are supported by a neckline.

An illustration of the head and shoulders pattern. Source: Corporate Finance Institute

The pattern comes into play primarily when the price breaks below the neckline in a correction that follows the formation of the right shoulder. That prompts traders to open short entries below the neckline, with their ideal target at a length equal to the distance between the head’s high point and the neckline.

What’s behind REN’s current setup?

REN has been forming what appears to be an upward sloping head and shoulder pattern, supported by a rising neckline.

In detail, REN price rose and declined into a trough around mid-December 2021, forming the left shoulder. Later, it rebounded sharply to create a higher peak — above the highest level of the first shoulder — and then fell all over again.

REN has since rebounded again and is now in the process of forming its right shoulder, as shown in the chart below.

REN/USD daily price chart featuring H&S setup. Source: TradingView

As a result, the price of REN may continue its rebound until it completes its right shoulder formation, which could be near the 50-day exponential moving average; the velvet wave, near $0.67. That is because of the wave’s recent history of limiting REN’s price rebounds.

Additional sell pressure could also come from the 0.618 Fib line near $0.633 due to its historical relevance as both support and resistance. Overall, a pullback looks likely to happen that would have REN make the right shoulder. Meanwhile, a correction towards the neckline, followed by a break below it, would confirm the head and shoulder setup.

In doing so, the move may shift REN’s downside target to $0.30, measured after adding the distance between the head’s high and the neckline to the breakout point. That is around 50% below the current trading price at $0.59.

The long-term outlook is still bullish

REN’s head and shoulder setup comes as a part of a wider price correction that has seen the token shed nearly 70% of its value from a record high near $1.92 in Feb. 2021.

On a longer-timeframe chart, REN appears to have been only consolidating inside a giant symmetrical triangle, suggesting that its correction toward $0.30 may end up causing a rebound toward $1.20.

REN/USD weekly price chart featuring a symmetrical triangle. Source: TradingView

Bullish cues for REN may also come from the growth of its backer of the same name. Ren’s core product, RenVM, brings interoperability to the decentralized finance ecosystem (DeFi). It holds users’ digital assets as they move between blockchains using zero-knowledge proofs over an sMPC based protocol.

Related: 3 reasons why REN price is up 340% from its July swing low

REN acts as a bond to run the so-called Darknodes that power RenVM’s sMPC network. Those who deposit 100,000 REN are able to run these Darknodes and as a result, are able to earn rewards in Bitcoin (BTC), Ether (ETH), Zcash (ZEC), and other tokens.

The total value locked (TVL) of the digital assets minted on all chains — which includes Ethereum, Binance Smart Chain, Solana, Polygon, Fantom, Avalanche, and Arbitrum — by RenVM came out to be $1.05 billion at press time compared to $6.6 million in June 2021.

Multi-year history of volume and total value locked in RenVM. Source: Highcharts.com

Meanwhile, the total amount of volume transacting through RenVM on all chains reached an all-time high of $8.89 billion on January 4th, 2022. That shows a steady increase in the Ren network’s adoption, thus boosting the upside prospects of REN token.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.